Gay men and women in Germany are being invited to live in an exclusive housing development, in a unique project that aims to make them more visible in the community.

Villa Anders ("Alternative Villa") in the working-class district of Ehrenfeld in Cologne will offer gay Germans the chance to live together in a discrimination-free environment, say the organisers, the Gay and Lesbian Living Association (VSLW).

The €6.7m (£5.3m) project will receive some state support, but is essentially meant to be self-financing in what developers have recognised as a commercially viable enterprise. So far, tenants have been found for all but 15 of the 70 flats, which they are expected to move into by the end of 2009.

Jens Lidy, 41, a theatre and television director, said he felt liberated by his decision to move from his home in a suburb of Cologne to a flat in the complex.

"As a gay person, I've spent my life playing a sort of hiding game, making sure the neighbours didn't know I was gay, because I never knew how they would react," he said. "I leaped at the chance to move into Villa Anders, because I feel I can finally be myself among people who have had a similar experience."

His new flat boasts a balcony, and a view on to the project's leafy green courtyard. But what makes it most attractive for Lidy, he says, is the opportunity it gives him to live as an individual in a community.

Cologne is home to the largest gay and lesbian community in Germany. It is also considered one of the most tolerant of European cities.

Some have questioned why the development is necessary, and whether it will have the effect of separating the residents from the rest of the community.

"I don't buy the 'ghetto' arguments," says Stefan Jüngst, a spokesman for the project. "The point is, this puts us in the middle of the community. In many European cities, like Warsaw or Moscow, this sort of thing would not be possible - because there's so much homophobia that the place would be firebombed within days."

Villa Anders follows several similar but unsuccessful projects in other German cities. A retirement home for gay and lesbian singles and couples was also opened in Berlin last year.

Jüngst said the aim had been to make the project as multi-generational as possible, but it had been difficult to attract over-60s, who were meant to fill 30% of the places. "Older gay men in particular have been fearful of becoming the targets of violence," Jüngst said. The number of attacks in Cologne in the past few years had been rising, he added.

The biggest challenge had been to work with the neighbours to overcome prejudices, Jüngst said.

"It is known that lots of projects like this have failed over the last 15 years largely because of local opposition," he said. "So we have taken the view we need to work closely together - inviting the neighbours to breakfast and meetings to discuss their concerns."

While the residents will have their own individual living spaces, they will be encouraged to mix together socially, and younger residents will be encouraged to help older tenants with shopping and other care issues.